Lack of methanol bids linked to reopening of Damietta port, Egypt

LONDON (ICIS)--A lack of buying interest for spot methanol in Europe has been linked to the reopening of Damietta port in Egypt, sources said on Friday.

Damietta port was reopened on Friday morning according to local news source Ahram Online.

The port was closed on Sunday 13 November following protests aimed at Egyptian state firm Misr Oil Processing (MOPCO), which jointly owns a fertilizer plant in Damietta with Canada-based Agrium.

The situation led to Methanex, also Canada-based, closing its 1.3m tonne/year methanol plant in ?xml:namespace>Damietta. The closure pushed European methanol prices up by €17–19/tonne tonne ($23–26/tonne) FOB (free on board) Rotterdam this week.

Traders said that Methanex was behind most of the spot deals done this week, indicating that the group needed to compensate for the lost Egyptian volumes with spot purchases in order to meet its contractual supply obligations.

However, on Friday, the methanol spot market was devoid of bids and sources linked this to the re-opening of the port, suggesting this could bring about the re-opening of the methanol plant.

If the plant does re-open in the next few days, spot prices are expected to decrease.